Botswana's underperforming power sector is impacting negatively on the country's economic growth
prospects, which is reflected in our readjusted real GDP growth rate to 5.2% (down from 6.2%) in 2014.
Despite this, we remain optimistic about the Botswanan economy overall and this modest optimism feeds
through into the food and drink sector, as the consumer is expected to benefit from easing inflationary
pressures and declining interest rates. Although high unemployment rates are likely to remain a drain on
growth in private spending, we predict that the 4% increase in public sector pay approved in April
will support more significant growth in private spending than we had previously forecast for 2014.

We forecast that improvements in Botswana's growth prospects in 2014 will also be supported by stabilising
demand for diamonds, the country's key export, and low base effects. The latest data reveal that over the
first six months of 2013 the value of Botswana's rough diamond exports posted growth of 9.7%, from
USD1,677.2mn in H112 to USD1,840.2mn. This improved performance in the first half supports our view
that growth will pick up from 2013. Exports of the precious stone account for around 70% of the total from
the state, and so a nearly double-digit gain will help boost the overall figure, leading to our forecast of 8.0%
growth in goods exports in 2013, followed by 10% growth in 2014. This and the rise of the country's coal
industry will serve to narrow the country's current account deficit, and eventually turn this into a surplus.